Question

Worthington Inc. is considering a project that has the following cash flow data. What is the project's payback period?

Year 0 1 2 3
Cash flows- $500 $150 $200 $300

Answer 1

The project's payback period is 2.5 years.

Step-by-step explanation:

year cash flow comulative cash flow

0 -500 -500

1 150 -350

2 200 -150

3 300

payback period = 2 years + 150-300

= 2.5 years

Therefore, The project's payback period is 2.5 years.